Housing charity advocates reduced tax liability for landlords who offer long-term leases to tenants

National housing charity Threshold has proposed tax incentives for landlords to offer their tenants long-term security.

In its pre-budget submission, Threshold has recommended using a sliding tax scale for landlords depending on the length of tenure they are offering tenants.

The most advantageous tax rate is applied to those who offer better security of tenure. It is anticipated that this measure would go some way to retaining supply and, in tandem, provide greater security of tenure for many renters who are facing uncertainty in a volatile market.

The charity says that the measure has been introduced in Portugal with some success since 2020. In Portugal rental income is taxed at 28 per cent, but it is down to 10 per cent for landlords with long-standing leases of more than 20 years.

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This proposed measure is one of several that the charity has called for to improve the private rental sector and prevent homelessness.

Threshold’s advocacy manager Ann-Marie O’Reilly said the sliding tax scale is a “win-win” for both landlord and tenant.

She added: “Under these agreements, a landlord would only be permitted to evict a tenant if they fail to pay their rent, engage in anti-social behaviour, or cause damage to the property.”

She has called on the Government to ensure that increased security of tenure is one of the outcomes achieved from Budget 2024 measures aimed at retaining small landlords in the sector:

“One of the critical issues facing the private rental sector is the high level of notices of termination being issued by landlords. This is creating pressures on supply and is very concerning for private renters who face the challenge of trying to find a new home,” she said.

“We welcome the latest comments from housing minister Darragh O’Brien regarding measures to incentivise small landlords to remain in the market, however it is imperative that any measures announced to retain landlords in the market are directly linked to increased security for tenants.”

Threshold is proposing the development of an NCT-style system of certification to ensure minimum standards of accommodation are met. Under this system, landlords would be required to provide a certificate to the Residential Tenancies Board (RTB), every four years, to demonstrate that their property meets minimum standards.

In addition to these proposals, Threshold is also calling on the Government to address affordability issues in the private rental sector through the establishment of a rent arrears fund and by increasing Housing Assistance Payment (HAP) base rates.